Our fourth (and final) excerpt below from The Money Lawyers, by Joseph C. Goulden, sheds light on the behind the scenes wrangling that occurred between the plaintiffs' bar and President Clinton with respect to the Private Securities Litigation Reform Act of 1995.  As described by the author,  Lerach played the "Nader card" to persuade Clinton to follow through on an early promise to veto what had in the end become a "veto proof" bill. 

Excerpt #4 from The Money Lawyers
Chapter: "Lerach and Weiss: The Class Action Scourges of the West and East"
by Joseph C. Goulden

But even as the reform act moved through Congress, the plaintiff lawyers retained a powerful ally: President Bill Clinton.  They gave him millions of dollars of campaign money; he passed himself off as their friend. During the summer and early autumn of 1995 he sent them repeated signals, Don't worry, I'll veto it and make them come back with something you can live with. I am your friend.

But was the President serious?  The act finally passed with so-called "veto-proof" margins in both houses. So all sides began a tedious game of Clinton-watching: would he sign, or would he veto? What few  persons appreciated was the deep, if ambivalent, relationship between Lerach and Clinton.

Lerach to Clinton:  "Veto -- or Else!"

Bill Lerach and I had our first in-depth talk in September 1998, the very week that seamy details emerged of Clinton's adulterous affair with White House intern Monica Lewinsky. Lerach interrupted to take a phone call from his wife. In sotto voce murmurs he seemed to be trying to soothe some ruffled feelings. 

After he hung up, he volunteered an explanation.  The Lerachs were hosting a fund-raising event featuring President Clinton the following weekend. Given that Lerach has two beautiful daughters within Lewinsky's age range, the women of the house were not enthralled at entertaining a guest involved in outrageous philandering.  Mrs. Lerach (the third woman to carry that title; she has since been replaced by the fourth) was upset also because she had just overseen an expensive decorating job, and the Secret Service detail wanted some things moved around.  But Lerach was going ahead with the fundraiser anyway. 

Lerach was typical of the Clinton supporters who during this troubling period were manually skilled enough to hold their noses and write checks at the same time. He found the President's sexual misconduct "reprehensible...unforgivable...a damned dumb thing."  Without breaking verbal stride, he went on to say that he admired the President anyway because of their similar up-from-nothing backgrounds to success in their respective fields. (*)

(*)   Mel Weiss is also a political friend of Clinton. In 1997, The National Law Journal surveyed White House coffee and overnight visitor lists to see how many lawyers partook of Clinton hospitality. High on the list was Mel Weiss, who gave $224,000 to the Democrats in the 1995-1996 election cycle, $200,000 of which earmarked for the Clinton-Gore campaign.

Given that he had personally donated hundreds of thousands of dollars to Clinton and other Democratic candidates over the years, and led efforts that brought in millions more, in the autumn of 1995 Lerach was ready to demand a quid pro quo. He wanted a promise from Clinton that he would veto the PSLRA. Clinton wavered.  He talked about the "veto-proof" vote.  Why should he squander political capital in a losing fight?  Lerach sensed that his supposed friend was wavering. And what he did can be interpreted as either (a) an attempt to persuade Clinton to stand by his stated intentions or (b) crass political extortion.

Whatever Lerach's motive, the central figure became Ralph Nader, who has long been a close friend and financial beneficiary of Lerach. Nader had long helped the plaintiff lawyers in their earlier fights against changes in securities laws. Now he (and Lerach) saw a means of bringing the President back in line. Along with other leftists, Nader that fall was increasingly disgusted with Clinton's centrist policies and his repeated betrayal of promises to persons who had helped him win election.  Nader had already made public sounds about mounting a symbolic challenge to Clinton in the California Democratic primary the next spring. No one gave him a chance of winning. But Nader could embarrass Clinton into moving left and force him to spend dollars that he preferred to save for the general election.  Lerach put the threat directly to the President, either during or just after a White House dinner that fall.

Lerach absolutely refuses to discuss what transpired between him and Clinton, or what he told the President. But the gist of his message was that either Clinton vetoed the reform act, or Lerach would give Nader enough money to make a serious run in the primary.

And Clinton capitulated. He vetoed the act, citing technical objections intelligible only to securities lawyers.            

Critics immediately jumped on Clinton for "selling out" to the plaintiffs' bar; Forbes Magazine, among other publications, noted that Lerach "had dinner at the White House" a few nights before the veto. Indeed he did, Lerach said -- along with about 400 other persons, including the chief executive of a Big Six accounting firm who supported the legislation. "Big deal, huh?" he scoffed.

The episode stands a vivid example of the power of money in American politics, and how a rich plaintiff lawyer can bully even a President of the United States.